Coca-Cola and IBM Still Top Brands

Overall brand value dips for first time in rankings’ history

Article |
Fri, 07/30/2010 - 23:10

In the face of a global economic crisis, the world’s biggest brands are still going strong. According to Interbrand’s 2009 Best Global Brand rankings, the top five—Coca-Cola, IBM, Microsoft, GE and Nokia—held their positions from 2008. But while Coca-Cola and IBM actually posted gains in their brand value, overall value for all 100 on the list fell 4.6 percent, marking the first such loss in the rankings’ ten-year history.

Among the brands that seem to have prospered during the recession is Google, which posted a 25 percent gain in value and moved from the tenth to the seventh position on the list. After Google, Amazon posted the highest value increase, of 22 percent as it moved up from No. 58 to the 43rd position.

The significant growth in these two brands in particular relates to one of the main themes that Interbrand has identified as crucial for the top brands: the use of technology to help consumers and improve the relevancy of the brand.

"Google has taken its core competencies of organizing the world’s information, and it’s found more and more useful and relevant ways for us to receive that value," said Andy Bateman, CEO of Interbrand New York. "As for Amazon, who would have thought that this online bookseller would one day be delivering our groceries and creating a digital reader which is now putting Amazon physically in your hands? Technology brands like this are finding new ways for us to interact with them, new ways for us to connect with them and therefore creating incredible value."

Banks and financial firms saw the biggest losses this year, with American Express dropping from 15th to 22nd, Citi sinking from 19th down to 36th (a 49 percent drop in value) and UBS losing 50 percent of its value as it went from 41 to 72. Several brands were hard hit by the sub-prime mortgage crisis and fell off the list entirely, including Merrill Lynch, AIG and ING.

"The category of financial services has called into question the trust, which is at the core of what a brand does. So, if you have the consumer scratching their head asking 'do I really trust you?' that's when your brand begins to crumble," said Bateman.

This loss of trust and brand value contrasts with the strong performance of familiar packaged goods stalwarts. Value increases were seen in companies like Heinz (9 percent), Kellogg's (7 percent), Nestle (13 percent) and Johnson & Johnson (7 percent). These "comfort brands" illustrate Bateman's assertion that "trust works both ways—you can use it to your advantage to these tough economic times, or ignore it to your peril."

While this year's overall brand value posted a loss, Bateman points out that it was less dramatic than can be seen in many other areas of the economy.

"Contrast that to GDP throughout the world, contrast that to stock market valuations around the world and you will see that the top one hundred brands hold their value much better than the valuations of those companies," said Bateman. "They have an insulating effect, and it speaks to the resilience of having a brand."